By early 2011, estimates are that Ghana will be producing approximately 120,000 barrels of oil per day. The Jubilee field has 500 million barrels of proven reserves and a potential for over 1 billion barrels. The production rate is expected to supply more than $400 million to the government’s 2011 budget and around $1 billion per year into the country in the early years. Promising indications from adjacent exploration oil wells could mean even higher levels of production and reviews in the next few years.
The Ghanaian government must establish a legal framework that ensures transparent publication of oil payments received, open and competitive contract bidding and contract disclosure, and active monitoring and participation by civil society. While there have been some positive signs – Ghanaian President John Atta Mills promised disclosure of oil contracts in March 2009 and a petroleum revenue management bill tabled in the Ghanaian Parliament in July contained important transparency and safeguard provisions – with first oil right around the corner, the necessary laws and systems have not been put in place. Despite government commitments, oil contracts remain unavailable to the public.
“The Ghanaian Parliament is currently debating an oil revenue bill, and important provisions – such as a prohibition against using oil revenue as collateral for loans – have already been stripped out of the bill. A Petroleum Exploration and Production Bill, which had numerous weaknesses, has been shelved. Celebrations of first oil are clouded by the fact that the government has yet to establish an independent regulator since the Jubilee discovery was announced in 2007,” said Richard Hato-Kuevor, Oxfam America’s Extractive Industries Advocacy Officer in Accra, Ghana. “These oil laws involve national questions that require national consensus. There is simply too much at stake for Ghana to adopt inadequate laws to manage this massive industry.”
The removal of a ban on using future oil revenues as collateral for loans is particularly worrying. Many oil producers around the world – such as Nigeria, Angola and Congo-Brazzaville – have gone deep into debt due to unsustainable oil-backed borrowing. Such loans, with steep interest rates and short repayment terms, are often taken out in secret with little or no parliamentary or public scrutiny. Recent press reports have noted that the state oil company, the Ghana National Petroleum Corporation, is working with Deutsche Bank and other private banks to secure a $500 million loan. The terms and purpose of the loan are not clear.
Ghana is one of the most peaceful and relatively prosperous countries in West Africa but remains poor with the majority of Ghanaians living on less than $2 a day. While poverty needs are pressing, stabilization and savings funds must be established and funded to avoid the price shocks and wasteful spending in the early years of an oil boom, which have bedeviled other countries.
Historically, the exploitation of natural resources in Africa has far too often led to increased poverty and conflict, a phenomenon often referred to as “resource curse.” In 2009, Africa produced 13 percent of the world’s oil with great investment and exploration throughout the continent, but this has yet to translate into tangible benefits for Africa’s poor. In fact, resource-rich countries in Africa have actually experienced lower growth rates than countries with scarce resources.
“Oil wealth threatens the growing democratic accountability that has been built in Ghana’s recent history,” said Mohammed Amin Adam, convener of Ghana’s Civil Society Platform on Oil and Gas. “This industry presents very real risks to Ghana’s fragile economy, including incurring too much debt through oil-backed loans. We as Ghanaians need to see December 15th as a day to wake up to these challenges and hold our government accountable for the management of this enormous opportunity for the country.”
In March 2011, Oxfam will publish a “Readiness Report Card” analyzing Ghana’s efforts to prepare its oil boom.
Click here to download Ghana’s Big Test: Oil’s Challenge to Democratic Development (2009)
]]>The company previously had lost a court case to Manu when she was accused of trespassing onto what she explained was her own farm land. After hearing of her complaints over the loss of her palm tree, the company immediately opted to negotiate paid compensation rather than defend itself in a messy court case.
In a community where many facing situations such as Manu’s would have resigned to fate, it is seen as a triumph for human rights awareness and activism for Manu to insist on adequate compensation. She negotiated for and actually got paid the sum of 500 Ghanaian Cedi (about $350) for her loss. This is the highest sum ever paid as compensation for the loss of any crop in Ghana.
“The company knows that I know my rights and so they are very careful when dealing with me,” said Manu.
Ghana’s chamber of mines, an association of mining companies, generally sets levels of compensation in such cases. Normally, this body recommends payment of five Ghanaian Cedi (about $3) for a palm tree.
Instead, Manu demonstrated that palm trees are very important to the livelihoods of the people of Dumase because of their multiple uses—namely they produce palm oil, palm kernels, sponges, brooms, palm wine, and palm fronds.
“We have a cause to fight for and a goal to achieve,” says Manu. “Sometimes people are not happy with what you are trying to achieve, but you shouldn’t let opposition stop you.”
Ghana, like most of West African countries, is home to abundant mineral resources. But this has not reflected on the lives of the vast majority of people who remain poor. Oxfam America has been working through its partners like the Wassa Association of Communities Affected by Mining (WACAM) in Dumase and other communities to enlighten and empower local people to assert their rights when interacting with mining companies.
“Manu has, in fact, fought against the injustice of miners and their Compensation Committee,” says Daniel Owusu-Koranteng, the Executive Director of WACAM. “She upheld her right in line with the provisions of the Mining Act.”
Manu is one the beneficiaries of WACAM’s training programs and regularly puts her newfound knowledge to good use.
“It’s important to empower women in mineral-bearing communities so that they can gain skills, confidence and the ability to make decisions about their lives,” says Eva Kouka-Quenum, Oxfam America’s West Africa Extractive Industries Program Officer.
]]>The media in Ghana are reporting that representatives of all the main political parties in Parliament are sufficiently concerned about the anticipated $1 billion in additional revenue in 2010 that they issued a communiqué calling for the government to stop issuing any new licenses for oil production until it can improve its regulations for the oil industry and clarify how the money will be managed.
An article in the government-owned Daily Graphic newspaper said that the members of Parliament “argued that less than one year before the drilling of the country’s oil in commercial quantities, there was not a single law before Parliament on how the country would manage the oil fields and the expected revenue as well as how to ensure that the environment was not damaged by the companies.”
The communiqué urged the government to use oil money to diversify its economy, and avoid an over reliance on oil that has been so disastrous in other countries in Africa. The communiqué also pointed out that Ghana needs to beef up its tax revenue agency to ensure oil taxes are properly collected and available for social programs to benefits its citizens. The members of Parliament called for the government to use 80 percent of oil funds to improve the “physical and social infrastructure” of the country, save 10 percent for future needs, and use the other 10 percent for stabilizing the budget.
In early 2009 Oxfam America and the Integrated Social Development Center of Ghana (ISODEC) issued a report called Ghana’s Big Test that recommended the country halt new licenses and disclose details of licenses and agreements it makes with oil companies as a means to increase transparency. Following the release of this report, Ghana’s new president John Atta Mills committed to do this, and also said the country would take steps to promote new and better regulations and foster open and public procedures for issuing licenses and setting policies.
To date, the government has not followed through on its commitments to disclose petroleum agreements, despite continued calls from civil society and parliamentarians to do so. Oxfam partner organization ISODEC has continued to promote opportunities to implement recommendations from the report. Steve Manteaw, campaigns coordinator at ISODEC, says that, “Ghana must control the pace of petroleum sector development so that it does not outstrip the capacity of the government and society to build institutions, regulations and standards.”
“The communiqué issued by the members of Parliament, cutting across Ghana’s political spectrum, emphasizes the importance of transparency and responsible management of oil revenues,” says Ian Gary, Oxfam America’s senior policy advisor and author of the Ghana’s Big Test report. “It will be vital for the government to fully consult with members of Parliament and the public at large on the legal framework for regulating the sector and managing revenues so that strong safeguards are in place before oil starts to flow.”
]]>Sarpong had moved here in 1984. He and his wife had raised six children on this farm. “It used to be lively here,” he said. “We lived as a family, and we had everything: goats, sheep, fowl—everything.”
They had used water from a stream running next to their home, now diverted by the waste rocks. Sarpong had sent his family away to live with relatives since they no longer had drinkable water. The AngloGold Ashanti mining company had offered Sarpong money for his farmland and trees in 2004, but he’d decided it was not enough and refused to move. He and about 35 others had formed an organization called Concerned Farmers’ Association of Teberebie to fight the terms of the compensation agreement, and they brought their case to Ghana’s courts. Although all the other members of the Concerned Farmers’ Association had moved off their farms, Sarpong had remained on his, awaiting the legal judgment.
As the case dragged through the courts, this past summer there was a legal decision that shocked Sarpong: a judge granted an eviction order, and AngloGold moved in and demolished what was left of the Sarpong homestead before his lawyer could file an appeal. According to a press release from Oxfam America’s partner WACAM, an environmental and human rights organization in Ghana, his dwellings were destroyed and all his property was seized, a violation of Ghana’s Minerals and Mining Act.
Sarpong is now living in WACAM’s office in Tarkwa, a 20-minute drive from Teberebie. He is 65 and has no home or means to make a living. WACAM’s executive director Daniel Owusu-Koranteng, says the court order to demolish Sarpong’s farm “shows how corporate power could erode our democratic structures and render our judicial system liable to corporate influence.”
The legal system in Ghana is slow—as in many countries—but it does not help the Concerned Farmers’ Association that the date slated for a judgment in their case came and went in August with no decision. The judge, it seems, happened to retire just before the ruling was due. A new judge has been assigned to the case.
When I got Sarpong on the phone in Ghana in August, he was happy to say hello but honored his lawyer’s advice not to discuss the case. Paul Ahornuy, who works for WACAM in Tarkwa, says the demolition of Sarpong’s houses created a furor in Ghana. Ahourny says it will take more time before the case in Teberebie can be resolved, but that “this is a human rights issue, and we need to support them in their struggle.”
]]>But a hungry child exists in a larger context: if we nourish communities, they can nourish their own children.
The woman on our cover, Fatou Doumbia, and other women in her village in Mali, pooled their resources last year. They set aside nearly a ton of millet as a defense against the hunger they’d seen as food prices spiked. Hers is another face of hunger: determined, resourceful.
After the last harvest, Oxfam reached out to supporters to respond to the food crisis. We’ve devoted much of this issue to looking at what communities have done to avoid the kinds of hardships they confronted. When people living in poverty are hit by a food crisis or natural disaster, they lack resources to tide them over.
Oxfam works to help people build their resilience. Let respect and hope fuel your efforts to support women like Doumbia.
]]>"President Obama's historic visit to Ghana, so early in his presidency and on the heels of important commitments at the G8 in Italy, signals the importance of African development to US interests," said Raymond Offenheiser, President of Oxfam America. "President Obama gets it. He understands that without a strong civil society, and capable, transparent governance, efforts to fight poverty and bring about social justice in Africa will at best be incremental. Good governance and sustainable use of resources will inspire more effective international assistance and increase trade."
President Obama had several recommendations that will help Africa on the road to prosperity. Here are a few of the highlights from the speech:
"In the 21st century, capable, reliable, and transparent institutions are the key to success—strong parliaments; honest police forces; independent judges; an independent press; a vibrant private sector; a civil society. Those are the things that give life to democracy, because that is what matters in people's everyday lives." These are all important parts of a thriving democracy, and President Obama made clear in his speech that these should be a priority in Africa just as they should be on every other continent. Building strong institutions that protect the rights of citizens, and allow business and entrepreneurs to flourish, will encourage investment in Africa. Oxfam is focused on helping civil society organizations work to hold their governments accountable. Examples include our partnerships with groups promoting new laws that accord equal rights to women and girls in southern Africa, and a region-wide proposal for uniform laws governing the mining industry in West Africa.
"So in Ghana, for instance, oil brings great opportunities, and you have been very responsible in preparing for new revenue. But as so many Ghanaians know, oil cannot simply become the new cocoa... Dependence on commodities—or a single export—has a tendency to concentrate wealth in the hands of the few, and leaves people too vulnerable to downturns." Resources like gold, diamonds, and oil can bring enormous wealth and potential for development. The road to prosperity will require leaders to avoid the path of poor management, corruption, violence and war. Ghana is a promising example of what is possible: Since Ghana discovered oil near its coast, the country's President John Atta Mills pledged earlier this year to disclose all petroleum agreements, so citizens can track what money comes to the government and how revenues are spent. This pledge has not yet been turned into reality. Real transparency needs to be built into a new legislative framework for how Ghana's new oil wealth will be managed, to ensure revenues are spent on social services and poverty reduction. Oxfam is working with the US Congress on legislation to require all US and foreign companies subject to Securities and Exchange Commission rules to disclose payments to developing country governments. This will be a critically important tool for citizens working to avoid corruption and waste of natural resource revenues.
President Obama also highlighted steps that the US would take to help combat corruption, including addressing corruption in the annual State Department human rights report, a recommendation that was made by Oxfam America in its Presidential transition memos.
"Aid is not an end in itself. The purpose of foreign assistance must be creating the conditions where it's no longer needed." The United States needs to make a number of key reforms to make our foreign aid system as effective as possible in reducing poverty and creating prosperous communities throughout the developing world. The US lacks a coherent strategy for global development. Oxfam is calling on the US to keep recipient country governments and their public informed on the nature and amount of American aid, and let each recipient country lead its own development agenda. President Obama's focus on using aid to defeat poverty is on the right track—one that we hope will lead to a new strategy for global development and a reinvigorated, effective aid system that will also rebuild US leadership in the world.
"A warming planet will spread disease, shrink water resources, and deplete crops, creating conditions that produce more famine and more conflict." Climate change is already affecting the lives and livelihoods of millions of poor people in Africa, as a recent Oxfam report detailed. Tackling these impacts is essential to addressing food security and broader development objectives. President Obama must commit to help bring about a comprehensive global climate strategy that will help poor communities cope with failed crops, dwindling reserves of clean water, and displacement caused by extreme weather events. The US and other wealthier countries must curb their greenhouse gas emissions to prevent climate chaos and provide adequate financial assistance to help African countries adapt in greener and more sustainable ways.
"Now, America can also do more to promote trade and investment." The economic welfare of Americans is inextricably linked with the well-being of people across the globe. While our foreign policy seeks to address the problems of poverty, disease and lack of economic opportunity, our trade policy has often exacerbated them, by demanding greater access to export markets in the poor countries, more favorable rules for US investors that can lead to greater poverty and inequality, and limiting access to affordable medicines. President Obama must develop a new trade policy with economic development as a core objective, spreading the benefits of trade as widely as possible, in the developing world as well as in the United States. This must include focusing efforts on the multilateral trading system to achieve a successful conclusion of the Doha Development Round, while working with Congress to pass legislation providing for duty-free and quota-free market access for all Least Developed Countries (LDCs).
]]>"Much like the Cairo speech, we are hoping the Accra speech will signal a new era of engagement, respect and partnership with Africa," said Raymond C. Offenheiser, President of Oxfam America. "This historic visit, so early in his presidency and on the heels of important commitments at the G8 in Italy, signals the importance President Obama places on African development."
Millions of Africans live in extreme poverty, and are now hit hard by the global economic and climate crisis. Sub-Saharan Africa alone is expecting losses of up to $245 billion this year as a result of the global slump, which is almost seven times the amount it receives in global aid. In Ghana, a resource-rich country, the life expectancy is a mere 58 years and 70% of people in the poor northern regions live on less than $1 a day. Despite the economic crisis, Africa continues to attract large investments to extract the riches that lie below ground, producing billions in government revenues. By 2015, oil revenues in African oil-exporting countries will exceed the amount needed to meet key social development goals by $35 billion annually—but investing this money wisely is not a sure thing.
"Africa is rich in natural resources like gold, diamonds and oil, but, too often, these resources have contributed to corruption, conflict, and human rights abuses," said Offenheiser. "But important progress can be made to turn this around. President Obama can help by supporting increased transparency and the disclosure of payments from US and other companies to African governments to help ensure responsible use of billions of dollars of government revenues per year."
Oxfam praised Ghana's recent commitment to transparency in the country's nascent oil sector and urged President Obama to encourage the government to follow through on these commitments and encourage other African governments to follow the positive steps the Ghanaian government has taken to date.
Oxfam also noted that key reforms are needed to make the US foreign aid system as effective as possible in reducing poverty and creating prosperous communities throughout the developing world. The US currently lacks a coherent assistance strategy for many of the countries it is trying to help. Oxfam is calling on the US to keep recipient country governments and their public informed on the nature and amount of American aid, help the recipient country to manage its own development, and ultimately, let each recipient country lead its own development agenda.
"American generosity is undermined by a reactive approach that prioritizes relief efforts—like food aid—that saves lives, but doesn't address underlying causes of poverty and hunger," said Offenheiser. "If the US wants to use its aid consistently help the poor in countries such as Ghana, it needs a global development strategy to guide the US government's efforts to fight poverty."
Climate change is already impacting the lives and livelihoods of millions of poor people in Africa, as a recent Oxfam report details. Tackling these impacts is essential to addressing food security and broader development objectives. President Obama must commit to help bring about a comprehensive global climate strategy that will help poor communities cope with the impacts of global warming, from failed crops to dwindling reserves of clean water and displacement caused by extreme weather events.
"Global hunger and poverty is a human tragedy exacerbated by faltering investments in agricultural production and the growing impacts of climate change," said Offenheiser. "We are pleased to see President Obama follow through on his commitments to reassert US leadership and address the challenges facing the billion people around the world without enough food."
]]>West African countries produce millions of ounces of gold each year, but the region is one of the poorest in the world. Provisions set forth in a directive issued by the Economic Community of West Africa States (ECOWAS) create a basis for helping communities ensure that mining revenues will be used in ways that will reduce poverty, and that they enjoy some of the benefits of wealth produced by mining—instead of simply enduring the costs in terms of pollution, and loss of farm lands. Uniform standards across the region will help prevent destructive competition for foreign investment that force governments to relax environmental and financial standards.
Richard Ellimah, from Obuasi, Ghana, says the new mining directive is "probably the most audacious attempt by the sub regional body to address concerns of mining-affected communities... We are looking forward to using the directive to demand respect for human rights, and freedom of information."
Campaign activities during the week of action will take place in Ghana, Burkina Faso, Senegal, Nigeria, and Mali, and will include debates and information workshops to teach people in communities affected by mining about the principles in the ECOWAS mining directive. Top among those principles is free, prior, and informed consent, which will give people the right to say whether—and under what terms—mining can be carried out in their community. Civil society organizations will reach out to the press, holding information workshops for the media and interested environmental and social organizations. Organizations also plan to contact their legislatures and mining ministries to ask them to change their regulations to comply with the ECOWAS directive on mining.
Six allied organizations held a press conference following the workshop and released a statement calling on the government to revoke permits it granted Newmont Mining of Denver to explore for gold in the Ajenua Bepo Forest Reserve. "When government revokes the Environmental Permit to mine in Ajenua Bepo Forest Reserve it would demonstrate its preparedness to define forest reserves as 'No Go Zones' for mining," the statement says.
"This campaign is the next phase of the movement towards an increased citizens' participation in public policy making and better governance and regulation in the mining sector in West Africa," says Ibrahima Aidara, Oxfam America's lead expert on extractive industries in West Africa.
]]>Last month, Newmont released the results of an independent review, which provides information about the company's community relationships and important recommendations for improving operations on the ground. The review, the first of its kind by a major mining company, came at the request of shareholders, led by New York-based Christian Brothers Investment Services, concerned about protests and environmental problems at Newmont's mining projects around the world. The company will formally present the results of the report to shareholders at the annual meeting.
"We commend Newmont for conducting a critical assessment of their community relationships. As shareholders gather this week, plans for urgent action to improve relations with the communities living near its operations should be at the top of the agenda," said Raymond C. Offenheiser, president of Oxfam America.
Recommendations from the report include handling community conflicts at an earlier stage, holding management accountable for community relations, and establishing effective grievance processes at all sites. The report indentifies problems with Newmont's community interaction at several locations, including sites in Ghana and Peru.
Nearly 10,000 villagers, mainly poor farmers, were displaced by the Newmont's Ahafo mine in Ghana. The report identified the long-term success of the resettlement as one of the greatest risks confronting the project and called on Newmont to actively monitor the implementation of resettlement. Newmont and the World Bank (IFC) will be conducting an audit of the resettlement program this year. Oxfam urges Newmont to make the audit process transparent and participatory.
Newmont's Yanacocha mine in Peru has been the site of repeated protests and violence in recent years. In 2007, local mining activists were the targets of harassments and death threats.
"The report identified an atmosphere of fear and intimidation among local residents at the Yanacocha mine, who worry about speaking out against the company out of fear of harassment by the mine's security forces," said Offenheiser. "It is very troubling that people are afraid to peacefully express their concerns. Newmont must address this situation immediately."
Communities affected by mining projects should have a role in decision-making about how the project will affect their lands and livelihoods. The report recommends an action plan that includes clarification of Newmont's commitment to the principle of free, prior and informed consent for communities.
"Newmont's endorsement of the principle of free, prior and informed consent for communities would be an important step forward," said Offenheiser. "The key now is to engage with local communities and apply this principle to company practice. We are pleased that Newmont's board of directors has accepted the report's analysis and recommendations and directed management to engage with affected communities on the report's findings."
The Newmont report also highlighted community concern about lack of access to information about the revenues the company pays to local and national governments, leaving communities unable to hold their governments accountable for how mining revenues are used.
"Newmont has been a leader in committing to greater transparency and can help address community concerns about revenue sharing by recommitting to disclose all payments made to host governments," said Offenheiser. "Endorsing mandatory public disclosure policies like the Extractive Industries Transparency Disclosure Act would be an important first step."
Oxfam advocated passage of the Extractive Industries Transparency Disclosure Act, legislation that would require all mining, oil, and gas companies registered with the Securities and Exchange Commission to disclose the payments made to foreign governments. The bill, which was introduced by House Financial Services Committee Chairman Barney Frank (D-MA) in the 110th Congress, is expected to be reintroduced shortly.
]]>This decision, reported by the Ghana News Agency, comes a week after the release of a report by Oxfam America and its local partner, the Integrated Social Development Center (ISODEC), on the challenges posed by Ghana's coming oil boom. The report, Ghana's Big Test: Oil's Challenge to Democratic Development, recommends, among other things: transparency of payments from oil companies to governments as well as disclosure of all petroleum agreements; open and competitive licensing procedures for oil and gas blocks; the active participation of civil society; and the establishment of an appropriate legal and institutional framework for the industry.
"This commitment by the government should be commended. In too many countries, petroleum agreements governing the sale of public resources have been kept secret. The new administration should build on this step to increase openness for more citizen participation in the formulation of public policy. In the case of oil, participation on the part of the people and of civil society has thus far been limited," said Ibrahima Aïdara, coordinator of the Extractive Industries Program in Oxfam's West Africa Regional Office based in Dakar, Senegal. "In addition to ensuring full transparency and public participation in the oil and gas sector, the government should also take steps to improve the management of the gold mining sector."
Steve Manteaw, media and campaigns coordinator for ISODEC, said: "President Mills has taken an important step to preserve Ghana's record of good governance and stability by preparing Ghana to support accountable and efficient development of the oil industry and the billions in government revenue it will generate."
The International Monetary Fund has predicted that government revenues from oil (producing approximately 120,000 barrels a day by 2011) and gas could reach a cumulative $20 billion over a production period of 2012-2030 in Jubilee field alone. The field gets its name from the discovery of oil there at the time of Ghana's 50th anniversary as a nation.
The Ghanaian president's commitment is in line with the objectives of Oxfam America's Right to Know, Right to Decide campaign focusing on greater transparency and the right of communities to have a say over how and whether oil, gas, and mining projects go forward. The emphasis on transparency and public participation is also a cornerstone of Oxfam America's efforts to increase public and civil society participation in the development of a regional mining convention being developed by the Economic Community of West African States (ECOWAS).
Since last year, ECOWAS has been in the process of developing a mining convention that would promote common social, environmental, and transparency standards in the mining region across West Africa. Civil society is participating actively in the process and is ensuring that the concerns of the citizens, especially communities near mining projects, are taken into account.
"The new government in Ghana has a chance to take a fresh look both at preparations for the oil boom as well as the historical legacy of increased conflict and social and environmental impacts from gold mining production. The agenda for reform is both broad and deep, but the commitments by the new president are an important step in the right direction," said Aidara.
]]>The independent review, released today, is the first of its kind by a major mining company and provides information about community relationships and important recommendations for improving the company's operations on the ground. The review, carried out over a two-year period, came at the request of shareholders, led by New York-based Christian Brothers Investment Services, concerned about protests and environmental problems at Newmont's mining projects around the world.
"The review is important for two reasons. First, it was driven by shareholders concerned about social impacts of Newmont's mining activities. And, second, the review confirmed that Newmont needs to take urgent action to improve relations with the communities living near its operations," said Raymond C. Offenheiser, President of Oxfam America. Oxfam will advocate for other companies to build on this experience in undertaking their own independent reviews.
The report indentifies problems with Newmont's community interaction at several locations, including sites in Peru and Ghana. Recommendations from the report include handling community conflicts at an earlier stage, holding management accountable for community relations, and establishing effective grievance processes at all sites.
Oxfam stresses the critical importance of community consent, meaning communities affected by mining projects should have a role in decision-making about how the project will affect their lands and livelihoods. According to the report, Newmont has endorsed this principle but has not fully implemented it.
"Newmont's endorsement of the principle of free, prior and informed consent for communities is an important step forward," said Offenheiser. "The key now is to engage with local communities and apply this principle to company practice. We are pleased that Newmont's board of directors has accepted the report's analysis and recommendations and directed management to engage with affected communities on the report's findings."
"The breadth of issues covered and the role of the advisory panel were encouraging aspects of this review," said Offenheiser. "However, the panel did express concerns about the company's resistance at times to providing requested information and laid out important suggestions for taking similar reviews forward."
Oxfam has particular concerns about the findings related to Newmont's Yanaocha mine in Peru—the site of repeated protests and violence in recent years. In 2007, local mining activists were the targets of harassments and death threats.
"The report identified an atmosphere of fear and intimidation among local residents at the Yanacocha mine, who worry about speaking out against the company out of fear of harassment by the mine's security forces," said Offenheiser. "It is very troubling that people are afraid to peacefully express their concerns. Newmont must address this situation immediately."
The Newmont report also highlighted community concern about lack of access to information about the revenues the company pays to local and national governments, leaving communities unable to hold their governments accountable for how mining revenues are used.
"Newmont has been a leader in committing to greater transparency and can help address community concerns about revenue sharing by recommitting to disclose all payments made to host governments," said Offenheiser. "Endorsing mandatory public disclosure policies like the Extractive Industries Transparency Disclosure Act would be an important first step."
Oxfam advocated passage of the Extractive Industries Transparency Disclosure Act, legislation that would require all mining, oil, and gas companies registered with the Securities and Exchange Commission to disclose the payments made to foreign governments. The bill, which was introduced by House Financial Services Committee Chairman Barney Frank (D-MA) in the 110th Congress, is expected to be reintroduced shortly.
]]>Ghana's recent discovery the major offshore "Jubilee" oil field has generated enormous interest in the country's oil production potential. While this would seem to be good news for Ghana, historically, the exploitation of natural resources in Africa has far too often led to increased poverty and conflict, a phenomenon often referred to as "resource curse."
"In too many countries, oil booms have bred corruption, underdevelopment, social conflict and environmental damage. Ghana's challenge as an 'oil hot spot' will be to ensure the right institutions and transparent policies are in place before production even begins," said Ian Gary, Senior Policy Advisor for Extractive Industries at Oxfam America and author of the report Ghana's Big Test: Oil's Challenge to Democratic Development, which will be introduced today at the Royal Institute of International Affairs in London.
The report identifies critical steps for the Ghanaian government, donors, oil companies, civil society and journalists to take in order to move quickly but deliberately in the face of the coming oil boom. These include transparent revenue and payment practices, open and competitive contract bidding, and active monitoring and participation by civil society. The report also recommends that the government enact a moratorium on signing new licenses, so they can organize an open bidding round and allow the country's legal and institutional framework to "catch up" to the pace of oil development.
"While these steps are not, by themselves, a simple recipe for overcoming the threats posed by the coming oil boom, it is difficult to see Ghana succeeding without them," said Gary.
Last year, Africa produced 12.5 percent of the world’s oil with great investment and exploration throughout the continent, but this has yet to translate into tangible benefits for Africa's poor. In fact, resource-rich countries in Africa have actually experienced lower growth rates than countries with scarce resources.
Ghana is one of the most peaceful and relatively prosperous countries in West Africa but remains poor with almost 80 percent of Ghanaians living on less than $2 a day. After democratic elections and a successful transition of power last month, Ghana’s new National Democratic Congress government hopes that oil revenues will help accelerate the country’s effort to meet UN Development Goals by 2015.
By 2011, estimates are that Ghana will be producing approximately 120,000 barrels of oil per day, along with significant quantities of gas. (The Jubilee field has 600 million barrels of proven reserves and 1.2 billion barrels of probable reserves.) The International Monetary Fund has predicted that government revenues from oil and gas could reach a cumulative $20 billion over a production period of 2012-2030 in Jubilee field alone. On Feb. 19, The World Bank board will consider $215 million in financing to Kosmos Energy and Tullow Oil in support of the development of the Jubilee field.
"Ghana's enviable record of good governance and stability makes this test even more urgent. Oil wealth threatens the growing democratic accountability that has been built in our country's recent history," said Steve Manteaw, media and campaigns coordinator for ISODEC. "The history of natural resource exploitation in West Africa has shown us just how vulnerable the people of Ghana will be without sufficient systems to properly manage oil wealth."
Ghana is no stranger to the natural resource industry. During the British colonial era, Ghana was known as the "Gold Coast" for its prolific gold deposits. With mining law reforms and changes to investment rules in the last 20 years, Ghana has recently experienced a boom in mining investment. But gold mining has led to small government revenues, increased conflict between companies and local communities, the removal of families from their lands, and increased environmental degradation. Coastal communities have seen how this industry has left mining communities, and they fear the same fate.
The problems of resource-rich countries combating the "resource curse" have recently risen to the top of the international development agenda with efforts to increase revenue transparency across the oil, gas, and mining industries. The report is being released on the eve of the fourth global conference of the Extractive Industry Transparency Initiative (EITI) taking place in Doha from February 16-18. EITI is a voluntary initiative designed to increase transparency of payments by companies to governments. While some progress has been made, the EITI has had limited reach. Ghana has published reports under this initiative, but has not been fully committed to extend this work to the petroleum sector. In the United States, the Extractive Industry Transparency Disclosure (EITD) bill was introduced in the House and Senate in 2008. This legislation, expected for reintroduction in 2009, would require all oil, gas, and mining companies registered with the SEC to disclose their payments to host countries and extend transparency as a truly global standard for company operations.
"While some progress has been made to increase transparency in resource-rich states, secrecy around revenues is just one part of the resource curse, and much more work remains to be done to prepare Ghana for the coming oil boom," said Gary.
]]>Amankwaa, 48, is a serious, no-nonsense business woman who rarely cracks a smile, but is patiently answering questions about her farm. She is gracious to visitors because she wants them to know she will not willingly sell her six small farms to an American mining company intent on exploiting the gold under the land in her Ghanaian village, Mehame, which means "don't bother me" in the local Twi dialect.
Amankwaa looks around the cocoa pods and all the trees. "This land was given to me by my grandmother; it had old cocoa trees on it and I cut them down and planted new ones," she says. "Now they are growing very well. This is what I depend on for everything, to keep my children in school and all the money we use for food we eat, the house we built, everything is from the cocoa farms."
"This farm is my life," she says finally, "My life is this farm."
The farmers here are industrious. One stood up in an informal meeting back in town to say "If you grow cocoa and don't make money, then you are not working hard." And the farmers in Mehame do make money: Amankwaa earns about $3,200 per year, which is roughly six times the national average income in Ghana. She and her husband have three children. The oldest is finished with school and growing cocoa himself, and the other two are in high school, a boy and a girl. They have a large concrete house with a proper roof, electricity, and clean water from a well.
Given everything they have achieved in Mehame, some of the farmers are skeptical about the proposal to expand the nearby Ahafo mine into their village, swallowing up their cocoa farms and homes. In exchange they would get compensation for their land and be given new homes somewhere else, but this is not an attractive option to Amankwaa and some others. "We don't want to be resettled somewhere, to be sent to another place, to another person's land," Amankwaa says. "We just want to be at peace with our farms and our children."
The American company looking to expand its mine into the area near Mehame seems to have the support of the government, and there is little opportunity for the local farmers to express their opposition to the mine expansion.
At first there were just rumors, then the villagers heard chainsaws in the forest, and found crews exploring for minerals without their permission. The company, Newmont Mining of Denver, arrived for formal visits with the chief, along with representatives from the Brong-Ahafo regional government, and a member of parliament. "Later on we heard the company found people and pushed them to say they wanted mining here, and used them to prove the community approved," Amankwaa says. She says this compelled opponents of mining to call on Oxfam America's partner WACAM to teach them how to defend their rights.
Working with WACAM, the farmers attended workshops in communities already affected by mining to learn about the potential social and environmental costs like pollution to the many streams that feed their farms. And they are learning to organize themselves, Amankwaa says. "With their advice, we have been able to unite and advocate for our position."
When a group of farmers convene to discuss their concerns about mining, the talk inevitably turns to ways they can defend their farms. Hannah Owusu-Koranteng of WACAM cautions the group against violence: "Protect your property, but don't sacrifice your life," she tells them. "Not all struggles should be violent. You can struggle by jaw-jaw, [talking], use your wisdom and language to win your struggle."
Abdullah Selifa, a 28-year-old employee of WACAM in Brong-Ahafo, says their first task it to ensure farmers like the ones in Mehame understand their rights in Ghana's constitution.
"We are fortunate to live in a democratic country," he says, and goes on to describe the articles in Ghana's constitution that protect the right to private property.
Nevertheless, the farmers are sure to have concerns about confronting powerful forces. "The people here have courage, but they are concerned about intimidation," Selifa says. "So we try to show them that they do not have to be afraid of struggling for their rights in the constitution—and that the government is there to protect their rights."
The community's latest move is to write their political representatives to ask for help. If they get a negative response, Selifa says they will take legal action to protect their farms.
]]>"That is it," he says finally, "that is it."
The nearby Ajenua Bepo Forest reserve near Akyem supports a rich ecosystem. The tall trees are impressive as they reach up to the sky. Around them is a warm climate, with ample rain, and rich soils. The farmers near the forest take advantage of it to grow plantains, cocoa, kola nuts, and vegetables. It is not an easy life. Everyone works hard. The more successful farmers may not be wealthy in western terms, but they do not see themselves as poor. They are proud of what they do.
The farmers in Akyem say it is not as tranquil as it used to be. The American company Newmont Mining has bought a concession to explore for gold in this area, and is negotiating with the villagers to get the land they farm, compensate them for their crops, and relocate them to another place to make way for a mining pit 1.5 miles long and half a mile wide.
The company even wants to mine in the forest reserve, and the government seems willing to allow it. In April 2008, 215 members of the Concerned Farmers Association in Akyem Adausina signed a petition against mining in the forest.
In 2005 there was a demonstration against the mining proposal, and one person was shot and killed. Oxfam America's partner WACAM came to investigate the killing, and called for an investigation into the death.
Samuel Fosuhene, 65, a village councilor at that time, became wary of the prospect of mining in the town. He resigned from the council and started supporting WACAM's efforts to organize people in the village to learn about and represent their rights in negotiations with Newmont.
Fosuhene and Kwabena say there are three main issues in Akyem:
Fosuhene's main concern is responsible stewardship of the land. "Land is bequeathed from generation to generation," he says. "So if by allowing surface mining we will deprive...the generation yet unborn, then you have to be very careful."
But land management is difficult. "In our part of the world, no individual owns land," says Hannah Owusu-Koranteng of WACAM. "Even the chiefs, they do not own the land, they keep it in trust for the future of the community and its needs."
This system is at odds with the government's right to all mineral rights. It can lease the land to anyone for mining in the name of development, Owusu-Koranteng says.
The 2006 Minerals and Mining Act requires people be compensated for loss of land allocated to them by the chief, and sharecroppers need to be compensated for the crops they are growing on the land. At this point, WACAM says the company is offering eight US dollars for a cocoa tree, even though the trees produce $20 of cocoa a year for 40 years at least.
Kwabena and his siblings are concerned about losing their family home, a sprawling, 12-room concrete house that was the center of the community when his father was the chief.
In front lies the pacification stone, where errant community members confessing disrespect to authority would show remorse by slaughtering livestock. Inside the bright red walls are a series of rooms, the drums the chief would use to summon the community for meetings, the ceremonial stool and dais on which the chief sat to hold court, and the palanquin used to transport him on special occasions. Kwabena shows visitors the home, his arms outstretched as he moves through the rooms and courtyards, describing the activities of the royal household.
"This is a palace," he says next to the dais where his father dispensed wisdom to the village. "Even though it is such an old building, we are comfortable in it."
With such a nice house, with such a rich history, Kwabena and his 21 brothers and sisters, and all their children are concerned about being relocated to smaller quarters. "My father used to occupy a 16-foot by 14-foot room," Kwabena says, gesturing off to the other end of the courtyard. "You can't remove us and put us in a 9-foot by 9-foot room. That is uncomfortable and I seriously object to it."
Standing behind their house, Kwabena raises an even greater concern: "All the great chiefs who have reigned in this village are buried here," Kwabena says quietly standing under the tree planted for his father. "We can't look on and allow them to dump [mine] waste on them. It is a sacred place."
"That is it," Kwabena says, this time with conviction. "That is it."
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